Amgen 2015 Annual Report Download - page 108

F-30
Debt issuances
We issued debt and debt securities in various offerings during the three years ended December 31, 2015, including:
• In May 2015, we issued $3.5 billion aggregate principal amount of notes, consisting of the 2.125% 2020 Notes, the
2.70% 2022 Notes, the 3.125% 2025 Notes and the 4.40% 2045 Notes. The notes may be redeemed at any time at our
option, in whole or in part, at the principal amount of the notes being redeemed plus accrued and unpaid interest and,
except as discussed below, a make-whole amount, as defined. The 2.125% 2020 Notes, the 2.70% 2022 Notes, the
3.125% 2025 Notes and the 4.40% 2045 Notes may be redeemed without payment of a make-whole amount if they are
redeemed on or after one, two, three and six months, respectively, prior to their maturity dates.
• In 2014, we issued $4.5 billion aggregate principal amount of notes, comprised of the Floating Rate Notes due 2017,
the 1.25% 2017 Notes, the Floating Rate Notes due 2019, the 2.20% 2019 Notes and the 3.625% 2024 Notes. The
Floating Rate Notes due in 2017 and 2019 bear interest equal to three-month London Interbank Offered Rates (LIBOR)
plus 0.38% and three-month LIBOR plus 0.60%, respectively, and are not subject to redemption at our option. The fixed
rate notes that were issued may be redeemed at any time at our option, in whole or in part, at the principal amount of
the notes being redeemed plus accrued and unpaid interest and, except as discussed below, a make-whole amount, as
defined. The 2.20% 2019 Notes and 3.625% 2024 Notes may be redeemed without payment of a make-whole amount
if they are redeemed on or after one month and three months, respectively, prior to their maturity dates.
• In 2013, we issued $8.1 billion of debt in connection with the acquisition of Onyx, comprised of obligations under a
Repurchase Agreement and a Term Loan.
Debt issuance costs incurred in connection with these debt issuances in 2015, 2014 and 2013 totaled $21 million, $18 million
and $46 million, respectively. These debt issuance costs are being amortized over the respective lives of the debt, and the related
charge is included in Interest expense, net, in the Consolidated Statements of Income.
All of our notes, other than our Floating Rate Notes and Other notes, may be redeemed at any time at our option, in whole
or in part, at the principal amount of the notes being redeemed plus accrued interest and, except for specified time periods described
above regarding certain of our notes issued in 2014 and 2015, a make-whole amount, as defined. In addition, except with respect
to our Other notes, in the event of a change-in-control triggering event, as defined, we may be required to purchase for cash all or
a portion of these notes at a price equal to 101% of the principal amount of the notes plus accrued interest.
Master Repurchase Agreement
We entered into a Repurchase Agreement pursuant to which Amgen sold preferred shares of one of its wholly-owned
subsidiaries, ATL Holdings, on September 30, 2013, and become obligated to repurchase the preferred shares from the counterparties
for the aggregate sale price of $3.1 billion no later than September 28, 2018. In May 2014, we repurchased the shares for the
aggregate sale price. While outstanding, we were obligated to make payments to the counterparties based on the sale price of the
preferred shares at a floating interest rate based on the LIBOR plus 1.1%. The obligation to repurchase the preferred shares was
accounted for as Long-term debt on our Consolidated Balance Sheet.
Term Loan Credit Facility
On October 1, 2013, we borrowed $5.0 billion under a Term Loan which bears interest at a floating rate based on LIBOR
plus additional interest, initially 1%, which can vary based on the credit ratings assigned to our long-term debt by Standard &
Poor’s Financial Services LLC (S&P) and Moody’s Investor Service, Inc. (Moody’s). A minimum of $125 million of the principal
amount of the loan is to be repaid at the end of each quarter, with the balance due on October 1, 2018. The outstanding balance of
this loan may be prepaid in whole or in part at any time without penalty. This credit facility includes the same financial covenant
as our revolving credit facility with respect to our level of borrowings in relation to our equity, as defined.
Convertible Notes
In 2006, we issued $2.5 billion principal amount of 0.375% 2013 Convertible Notes at par. The conversion value was payable
in: (i) cash equal to the lesser of the principal amount of the note or the conversion value, as defined, and (ii) cash, shares of our
common stock, or a combination of cash and shares of our common stock, at our option, to the extent the conversion value exceeded
the principal amount of the note (the excess conversion value). In February 2013, our 0.375% 2013 Convertible Notes matured/
converted, and accordingly, the $2.5 billion principal amount was settled in cash. We also elected to pay the note holders who
converted their notes $99 million of cash for the excess conversion value, as allowed by the original terms of the notes.
Concurrent with the issuance of the 0.375% 2013 Convertible Notes, we purchased a convertible note hedge. The convertible
note hedge allowed us to receive shares of our common stock and/or cash from the counterparty to the transaction equal to the
amounts of common stock and/or cash related to the excess conversion value that we would issue and/or pay to the holders of the